October 2012

Jobs have been at the center of my life since I took up my own new job as World Bank Chief Economist on October 1. This began within hours of my joining the Bank, when I participated in the press launch of the World Development Report 2013 on Jobs. Following that, my interactions at the Tokyo Annual Meetings of the World Bank and IMF also brought the jobs issue into high relief, with ministers and policymakers from around the world reacting to the WDR, especially in some of my corridor conversations with them.

I have a longstanding interest in labor-related issues, the role of labor laws, and on the impact of privatization on jobs. So I was pleased by the clairvoyance of the World Bank in choosing jobs as the topic for the 2013 World Development Report, much before the Bank knew that it would choose me to be the Chief Economist.

For those of us following the US Election 2012, the words ‘manufacturing’ and ‘jobs’ are hard to miss. Building on that buzz, The Economist recently conducted a debate: “Will manufacturing return to the West?” While the US election is a good ten days away, the decision on this debate is out: Manufacturing will return to the west. Irrespective of the verdict, both the sides – opposing and defending the motion- have provided numerous insights in to the trends that are unfurling in China and US. Read them here.

Inequality, alongside jobs, is the proverbial elephant in the room amidst the US presidential elections. Joe Stiglitz has a new 'Campaign Stops' blog in the New York Times online that draws on The Economist magazine's special series from earlier this month. Stiglitz discusses the perils of underplaying the great divide between the one percent in the US and the middle class. Meanwhile, on the other side of the debate, Kevin Hasset of the American Enterprise Institute along with Aparna Mathur, write in the WSJ that inequality studies that focus mainly on pre-tax incomes are flawed because they overlook transfer payments such as food stamps, unemployment insurance and other safety net programs. Read the article here.

Malaria, a life threatening mosquito-borne infectious disease, poses a risk to approximately 3.3 billion people, approximately half of the world’s population. Most malaria cases occur in Sub-Saharan Africa, but they also occur in Asia, Latin America, and to a lesser extent the Middle East and parts of Europe. In 2010, malaria was found in 106 countries and territories, with an estimated 216 million cases and nearly 0.7 million deaths – mostly among children living in Africa. In addition to its health toll, malaria places a heavy economic burden on many countries with high disease rates, with estimates of as much as a 1.3 percent reduction in GDP in those countries.

As I mentioned in my previous post, Dr Jim Kim, President of The World Bank, spoke at the post-MDGs session in Tokyo, highlighting his vision of the World Bank’s role in the post-2015 process and what the Bank can do to assist its member countries.

In my post “Should you trust a medical journal?” I think I might have been a bit unfair. Not on The Lancet, which I have since discovered, via comments on David Roodman’s blog, has something of a track record of publishing sensational but not exactly evidence-based social science articles, but rather on Ernst Spaan et al. for challenging the systematicness of their systematic review of health insurance impacts in developing countries. It’s not that I now think Spaan et al. did a wonderful job. It’s just that I think they probably shouldn’t have been singled out in the way they were.

Last week I was fortunate to attend the World Bank-IMF annual meetings in Tokyo. The main purpose of my visit was to ensure the smooth functioning of a seminar on the ’Next Generation of MDGs’ and the post-2015 global development framework. I hope many of you watched the discussion, which was live web streamed. For those who missed the discussion by the high level panel, moderated by the World Bank’s brand new Chief Economist, Kaushik Basu, watch it here.

The panel consisted of an impressive group of people: President Ellen Johnson-Sirleaf of Liberia; Helen Clark, Administrator of the UNDP, Gunilla Carlsson, Minister for international Development Cooperation, Sweden; Miguel Castilla, Minister of Economy and Finance, Peru; and Emerging Markets’ just-crowned Minister of Finance of the Year, Akihiko Tanaka, President of the Japan International Cooperation Agency (JICA); our co-host, Homi Kharas of the Brookings Institute and Dr. Jim Kim, President of the World Bank, who got caught up in meetings and was unable to be there the whole time.

Like all other development agencies, the World Bank has few systematic ways to measure, track or even recognize the effectiveness of its work. Instead, stakeholders are more likely to insist on fiduciary oversight and lending volumes; management is more accountable for meeting lending targets and upholding administrative requirements than meeting development goals; and approvals of Bank projects and country partnership strategies – not surprisingly – are rarely based on explicit analyses of their development effectiveness.

None of this is new. Enhancing “development effectiveness” emerged as a key concern in a recent review of the World Bank’s governance structure, for example, but similar concerns have been expressed at least since the Wapenhans Report twenty years ago. What is new is the energy surrounding current efforts to put development effectiveness at the center of Bank operations. But doing this means confronting the essential problem that there is no cookbook for development. Whether we care about “big” development – tripling incomes per capita in Malawi over the next 15 years – or “little” development – improving health outcomes for rural women in Orissa this year by expanding access to cooking stoves – some things we think work actually do work, at least under certain conditions; other things we only think work, when in fact we have no evidence either way; and we are fairly sure that even all the things we know (or suspect) work will only get us part-way towards our development goals.

On October 8, President Mohamed Morsi issued a decree pardoning all ‘Arab Spring’ political prisoners. While the decree, if implemented, marks a milestone in Egypt’s hard-fought 21-month-long revolution, the quotient of inequality that contributed to setting it off still remains.

From the Arab Spring to Occupy Wall Street, inequality has risen to the top of social agenda. However, our measures of inequality are often limited to final outcomes, such as income, wealth, and educational achievement, which do not distinguish between the impact on inequality of personal responsibility and that stemming from factors beyond the scope of individual responsibility.

The wild tiger population of tropical Asia has plummeted drastically in the last century, from about 100,000 to 3,500, with the Bali, Javan and South China subspecies believed to be extinct in the wild. An estimated 2,380 Bengal tigers survive, along with 340 Indochinese, 500 Malayan and 325 Sumatran tigers, with their remaining habitat being mostly the upland areas arcing from southwest India to northwest Indonesia. Long term survival of the tiger is dependent on conservation of these tiger habitats, which has prompted the World Bank to join the Global Tiger Initiative (GTI), along with the governments of the various tiger habitat countries and many civil society and private sector organizations.

The first week as World Bank Chief Economist has left me excited, on the trot, (not to mention, slightly exhausted) and more convinced than ever that John Maynard Keynes was right when he wrote in the General Theory that the course of history, for good or for bad, is determined more by ideas and opinions than vested interests. I assert this with some confidence because of my somewhat unusual career experience, beginning with academic research, writing and teaching to being thrown into the deep end of the policymaking pool, when, in 2009, I was appointed India’s 14th Chief Economic Adviser and the first with no taint of prior experience in government.

I feel privileged to have this new challenging job and hope to engage with readers of this blog as I become more conversant with the Bank's work and also with writing a blog, which I have never done before, my social interaction on the web thus far being restricted to the 140-character tweet.

During the course of many G20 and other high level meetings with policymakers when I was still wearing my India hat, I was struck time and again by the fact that having a critical mass of people who are well-intentioned and susceptible to good ideas can do so much to break the toughest of impasses, whether in trying to decide on monetary and fiscal policies or in targeting welfare benefits or in battling poverty.

An organization with ‘motor company’ in its name might produce several types of vehicle (cars, trucks, etc.) in several variations (models) at several different plants, and might sell these vehicles in several different regions of the world. The company wouldn’t last long if it didn’t know how many of each model – and at what cost – it was producing in each plant, and how many – and at what price – it was selling in each region. In the World Bank – where we like to think of ourselves as the ‘knowledge bank’ – we produce several types of document in several vice presidencies (VPUs) and we make them available in hard copy and in electronic format in all regions of the world. Yet as far as I know we don’t systematically track how many of each document type each VPU produces, let alone how successful each is in terms of sales and downloads. We have these data for World Bank books, but they’re a small fraction of our overall document output.

The lack of data ought to make it hard to think about how the institution might do things differently in its knowledge work to serve developing countries better. What type of Bank documents are produced most? And which are used most? Which VPUs are the big producers of knowledge? Which document types are downloaded most? Which VPUs produce the most downloaded documents?

When my team and I started working on the World Development Report 2013, slightly more than a year ago, we were puzzled. We had been asked to write about jobs, and there was no doubt that they were a major concern around the world. Events such as the global crisis or the Arab spring had put jobs center stage. In developing countries, finding employment opportunities for massive numbers of youth entering the labor force was urgent. Middle-income countries were struggling to move up the value-added ladder in production and to extend the coverage of social protection. Technology and globalization were changing the nature of work worldwide. In all cases, jobs were at stake. And they were clearly one of the main preoccupations of policy makers everywhere.